Zillow Group is getting into the business of buying and flipping homes, veering further from its original business model that relied on advertising revenue.
Zillow said last Thursday it will purchase homes from consumers in Las Vegas and Phoenix, renovate them and aim to flip them within 90 days. The company initially plans to hold 300 to 1,000 homes by the end of the year, which amounts to an investment in the $75 million to $250 million range.
Zillow executives said they aren’t looking to get rid of real-estate agents, who generate revenue for its listings business by purchasing ads and customer leads. Instead, they say they have handpicked agents to work on the transactions in its “Zillow Instant Offers” business.
Nonetheless, agents are much less essential to these quick-flip transactions, which are powered by technology rather than face-to-face interactions. This is the latest in a string of new technologies and businesses that are threatening to disrupt the multibillion-dollar residential brokerage business and the livelihood of tens of thousands of REALTORS®.